Discrimination, Diversity, and Development: The Legal and Economic Implications of North Carolina’s HB2

By Christy Mallory and Brad SearsMay 2016

This report considers the
legal and economic implications of North Carolina’s HB2. HB2 discriminates against the over 37,800 transgender people in the state by prohibiting them from using restrooms consistent with their gender identity in public schools and universities, and in state government buildings. Further, HB2 repeals all local non-discrimination ordinances that provided protections to many of North Carolina’s over 336,000 LGBT residents.

After considering the size of the LGBT population in North Carolina, and the legal landscape and social climate they face, this report estimates that HB2 directly puts at risk almost $5 billion just in terms of federal funding and business investment. In addition, HB2 contributes to a challenging environment for LGBT people that potentially costs the state tens to hundreds of millions of dollars each year. More specifically, this report identifies following ten actual or potential harmful economic impacts:

Discrimination.HB2 conflicts with federal laws, the laws of other states, and the policies of most large companies. As a result, North Carolina risks losing: 1. Loss of Federal Funding 2. Loss of Business Investment 3. Reduced Travel and Tourism 4. Litigation and Enforcement Costs

Development. HB2 adds to a challenging environment that LGBT people already face in North Carolina. By moving toward exclusion and away from inclusion, HB2 exacerbates:5. Bullying in School 6. Workplace Discrimination 7. Health Disparities

Diversity.HB2, by adding to an already challenging legal landscape and social climate for the over 168,900 LGBT workers in North Carolina, has the following harmful economic impacts: 8. Productivity 9. Retention 10. Recruitment